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Southern Cross residents need government rescue plan

David Cameron has been urged to step in with a “rescue plan” for more than 30,000 elderly care home residents as Britain’s biggest private care provider faces financial ruin.
Southern Cross residents need government rescue planElderly campaigners, charities and union leaders warned that the threat of collapse at Southern Cross Healthcare Group would be a “catastrophe” that could threaten the lives of residents at its 750 homes.

In response, Downing Street offered a “guarantee” that elderly and disabled people in Southern Cross homes would not lose out, but declined to say whether any emergency funding would be available.

The crisis comes as the public spending watchdog, the Audit Commission warns that the quality of services for elderly people will be under further threat as councils are forced to negotiate lower fees for private care places.

Southern Cross, which made a £311 million loss in the six months to the end of March, has blamed its problems on reduced council spending on long-term care. The group announced this week that it will be forced to cut the rent it pays to the landlords of the homes it runs by 30% for four months.

Saga, the over-50s group, called on ministers to draw up an urgent “rescue plan” for care homes in trouble. Ros Altmann, Saga’s director general, said: “The government and local authorities may have to step in and take control of the situation.

“There must be a plan for rescuing failed care homes, to protect their elderly residents properly. Of course some homes do fail, but not on a massive scale like this.

“Lives could be at risk as a result of Southern Cross collapsing.”

The GMB union, which has around 12,000 members working in the care homes, urged politicians across the UK to take action to help secure the future for the staff and the residents.

General secretary Paul Kenny said politicians must “sort out the uncertainty” the residents face. “These are not factories facing closure, they are a vital part of the social fabric of every community,” he said.

The Prime Minister’s official spokesman gave a guarantee that affected residents would not “lose out”.

“We are clear that we are putting the interests of residents at the top of the list,” he said. “It may well be in their interests to keep them in the same place. But I think we have to look at that very carefully and we have got to let this process continue with the company and the various other interested parties.”

However, he declined to discuss whether there was any contingency in care budgets to cover extra costs. Southern Cross is in talks with its landlords, who could force the group into deeper trouble if they refuse to agree to the rent cut.

Jamie Buchan, chief executive of Southern Cross, said he believed the company would survive, with fewer homes, but there would be no “need” for a government bail out. He told The Daily Telegraph: “I don’t think the Government would or would need to provide financial support.”